Rolls-Royce plans to lay off 800 more workers from it Marine business throughout 2016 and 2017 citing ”continuing weakness in the maritime market” as the reason for the third wave of job cuts at the division in less than a year.
”Today’s proposals follow a series of cost reduction initiatives carried out over the past three years to improve the affordability and competitiveness of the Marine business. The proposed job reductions are in addition to the reduction of 1,000 employees announced in May and October last year. The Marine business currently employs around 4,800 people in 34 countries,” the company said in a statement.
Planned restructuring measures also include a further simplification of the structure of the business, with a streamlining of the senior management team, which, with the announced job cuts, is expected to bring an estimated GBP 45-50 million of annualised savings from mid-2017, the company said.
Costs of this restructuring are expected to be around GBP 20 million, split between 2016 and 2017.
As part of the programme, investments are also being proposed to establish an R&D centre for the development of new propulsion products, and an expanded services hub for Northern Europe, both in Ulsteinvik, Norway. The organisational changes will also increase the strategic focus on developing further electrical and digital technologies as the maritime industry shifts towards a more digital future where Ship Intelligence plays a greater role, Rolls-Royce said.
“The ongoing market weakness that has followed the dramatic fall in the price of oil continues to have an adverse impact upon our order book and profitability. Reducing our workforce is never an easy decision, but we have no option but to take further action beyond the changes we have made to date. This remains a fundamentally strong business, but we need to overcome the immediate challenges and focus our investments on the technologies that will shape our future growth,” Mikael Makinen, Rolls-Royce, President – Marine, said.